Archives for December 2014

Even though the euro continued moving toward the downside past our invalidation point, its movement so far has been in 3 waves, which highly suggests that an ending diagonal may very well be unfolding as the final stage of this protracted downtrend.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
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It was expected that Cable is going to unfold towards the downside under the main count which was not what happened and Cable reversed directions moving towards the upside and the invalidation point is yet to be reached. Therefore the main count idea is still intact.
However, Cable broke the trend line connecting minute waves ii and iv pink towards the upside and that increases the probabilities of the alternate count. If the alternate count is the correct one, Cable should find support above that trend line.
At this stage both counts have equal probabilities and as always we will wait for either count`s confirmation point to be met to determine the highly probable count.
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As expected the euro moved toward the downside, reached our first target at 1.2129 and exceeded it by 5 pips.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
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Today Cable unfolded towards the downside which is more in line with the main count we have and the confirmation point is yet to be reached.
I am updating the main count adding tighter confirmation point. We have to keep in mind that this count expects one last decline towards the downside to complete intermediate wave (1) black and upwards reversal to follow within intermediate wave (2) black.
An alternate count is presented which expects that intermediate wave (1) black is complete and that intermediate wave (2) black is at its very early stages. It is worth noting that the hourly confirmation point is only a short term confirmation point and that the final confirmation point is by movement above the end of minor wave 4 blue.
As always we will wait for either count`s confirmation point to be met to determine the highly probable count.
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As price moved lower past our invalidation point, it's confirmed that minor wave 5 is still unfolding toward the downside. This should be viewed cautiously, however, since the downward potential should be fairly limited.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
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Cable unfolded as expected and both targets were reached and exceeded by 4 pips before reversing directions and moving towards the upside.

This week`s main count expects Cable to continue towards the downside in a motive manner within an ending diagonal while the alternate count expects that Cable has more to offer towards the upside in a corrective wave (ii).

In a nutshell, the main count expects one last push towards the downside before reversing directions towards the upside in a mid term uptrend. While the alternate count expects that downwards movement has more to offer towards the downside.

As always we will wait for either count`s confirmation point to be reached to determine the highly probable count.

Wave 4 blue unfolded as a double combination labeled waves w,x and y pink with wave y pink failing to create a new high above the end of wave w pink.

Wave 5 blue is expected to be unfolding towards the downside as an ending diagonal with waves i through iv pink are expected complete and wave v pink is unfolding towards the downside.

This count would be confirmed by movement below 1.5486.

At 1.5464 wave v pink will reach 0.618 the length of wave iii pink.

This count would be invalidated by movement above 1.5683 as wave iv pink may not exceed the end of wave ii pink within an ending diagonal and it should be noted that the invalidation point will be moved to the end of wave iv pink once we have confirmation on the hourly chart that wave v pink is unfolding towards the downside. Also this count would be invalidated by movement below 1.5389 as by movement below that level wave iii pink will be the shortest wave and that violates Elliott`s rule that a third wave cannot be the shortest wave.

Alternate Wave Count

This count expects that wave 5 blue is unfolding towards the downside as an impulse.

Within wave 5 blue waves i and ii pink are expected complete and wave iii pink is extending towards the downside.

Wave i pink unfolded as an impulse labeled waves (i) through (v) green.

This count would be invalidated by movement below 1.5486 as within wave (ii) green no B wave may retrace more than 100 % the length of an A wave. As well this count would be invalidated by movement above 1.5683 as wave (ii) green may not retrace more than 100 % the length of wave (i) green.

Cable continued drifting towards the upside increasing the probabilities of the alternate count.
We are updating both counts according to the latest price action and the main count expects one last decline before completing wave (1) black. The alternate count on the other hand expects further upwards corrective movement within wave 5 blue.
As always we will wait for either count`s confirmation point to be met to determine the highly probable count.
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Even though the euro just touched our invalidation point, it hasn't made a new low yet. Seeing that this is actually another point that supports our current view, we've slightly modified our main count to account for the latest developments.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
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For the first week in a very long time, price has formed a relatively very small Spinning Bottom, which is a sign of indecision. Coupled with the deeply oversold momentum conditions and an Elliott Wave pattern that seems mature enough to be complete, perhaps the time has come to see if the new year will start with a bullish reversal.

And speaking of the new year, be sure to check our current holiday special offer at https://www.elliottwaveforex.com/welcome2015/.

Elliott Wave chart analysis for the EURUSD for 26th December, 2014. Please click on the charts below to enlarge.

Main Weekly Wave Count

The bigger picture sees the euro within the middle stage of a double combination labeled cycle waves w, x and y. (There are other ways to label this movement, but this is probably the most conservative count, and it exhibits near textbook Fibonacci relationships.)

Intermediate wave (E) reached just short of 61.8% the length of intermediate wave (C), and it retraced a bit short of 61.8% of intermediate wave (D) — both of which are very dependable Fibonacci relationships, highly suggesting that primary wave B is complete.

This count expects intermediate wave (1) to be either complete or very near completion, and that the euro will start moving toward the upside in intermediate wave (2). This will be initially confirmed by movement above 1.2570.

The MACD indicator is about to form a bullish crossover and the Stochastic indicator is very deeply oversold.

At 1.2863 intermediate wave (2) would retrace 38.2% of intermediate wave (1), then at 1.3295 it would retrace 61.8% of its length.

This wave count is invalidated by movement above 1.3993 as intermediate wave (2) may not move beyond the start of intermediate wave (1).

Alternate Weekly Wave Count

This count expects minor wave 5 to be still unfolding toward the downside.

At 1.2079 minor wave 5 would reach 100% the length of minor wave 1, then at 1.1776 it would reach 161.8% of its length.

This wave count is invalidated by movement above 1.2570 as this is the start of minor wave 5.

No change in the wave count since the market has been closed today. Hope you guys are enjoying Christmas with your families and loved ones. Have a magical Christmas and a Happy New Year.
As a recap, we are updating the main count according to the latest price action and the main count expects one last decline before completing wave (1) black. The alternate count on the other hand expects further upwards corrective movement within wave 5 blue.
As always we will wait for either count`s confirmation point to be met to determine the highly probable count.
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